It seems like Nintendo has serious communication problems with Western studios when they're allowed to go off and do their own thing. From the making of Geist:
After about eight months of work, n-Space finished the prototype and sent it to Nintendo of America, from which it was sent to Nintendo. Nintendo latched onto the game, and it was decided N-Space and Nintendo would work together to develop the game. After six months, object possession was introduced in the game after some suggestions from Shigeru Miyamoto. Geist was first shown to the public at the E3 2003 and it was later stated that Geist would be released the same year. In the months after the E3 both companies realized they "weren't working on the same game"; N-Space had envisioned Geist to be a first-person shooter while Nintendo (more specifically, Kensuke Tanabe) considered it to be a first-person action-adventure. The adjustments caused the game to be delayed many times until it was finally released two years later in 2005
Retro's most recent original project being canned ... I think Nintendo and Western studios have disagreements when it comes to original IP.
When it's an established IP the developer can't really argue too much because there's an established formula to follow.
Maybe, but Geist is simply one instance. I don't think Nintendo doesn't trust Western studios with New IP, but I do think they never really had any luck finding a good one. Project HAMMER was the most infamous example, Nintendo Software Technology was making the game, but their upper management at the studio was plagued with Japanese elitism, and the poor developers at the lower level working on it were struggling to make the game fun. Miyamoto also wasn't too keen on the fact that more money was going towards expensive CGI cut-scenes vs the actual game. After a failed reboot as a more cartoon game, the project was cancelled, half the team left the company, and NCL was so sick with NST's bullshit that they locked them into MvDK games, where they remain to this day. Nintendo does trust western developers to make games, even new IP if the concept is good. It's just that in cases like NST, they have to earn that trust and if they damage it, then you're wasting their time.